Part 1:
Field Instruments completed the following transactions and events involving its machinery:
2004
Jan. 1 Paid $106,600 cash plus $6,400 in sales tax for a new machine. The machine is estimated to have a six-year life and a $9,800 salvage value.
Dec. 31 Recorded annual straight-line depreciation on the machinery.
2005
Dec. 31 Due to new information obtained earlier in the year, the machine's estimated useful life was changed from six to four years, and the estimated salvage value was increased to $13,050. Recorded annual straight-line depreciation on the machinery.
2006
Dec. 31 Recorded annual straight-line depreciation on the machinery.
Dec. 31 Sold the machine for $25,240 cash.
Need to do:
Part 2:
Prepare journal entries to record these transactions and events.
Refer to the financial statements of Krispy Kreme (attached) in Appendix A to answer the following:
1. What percent of the original cost of Krispy Kreme's property, plant, and equipment remains to be depreciated as of February 2, 2003, and February 3, 2002? Assume these assets have no salvage value.
2. Over what length(s) of time is Krispy Kreme amortizing its intangible assets?
3. What is the change in total property and equipment (before accumulated depreciation) for the year ended February 2, 2003? What is the amount of cash provided (used) by investing activities for property and equipment for the year ended February 2, 2003? What is one possible explanation for the difference between these two amounts?
4. Compute its total asset turnover for the year ended February 2, 2003.